(Reuters) - BBCN Bancorp Inc BBCN.O, a California-based bank that caters mainly to the Korean-American community, said it would buy smaller rival Wilshire Bancorp Inc WIBC.O in a tax-free, all-stock deal valued at about $1 billion.
Wilshire shares were up 6.1 pct at $12.49, slightly below the BBCN’s implied offer price of $13. BBCN shares were down nearly 1.7 percent.
BBCN's move to buy Wilshire comes two weeks after Hanmi Financial Corp HAFC.O proposed to merge with BBCN in an all-stock deal valued at about $1.6 billion.
Hanmi’s proposal had implied a price of $19.98 per BBCN share.
Following Monday’s announcement by BBCN, Hanmi said it found the merger “surprising” as the purchase price represents about 5 percent discount to the proposal Hanmi made to BBCN.
“What is even more disappointing is that BBCN and its advisors did not engage with us in any discussions before entering into an inferior agreement with Wilshire,” the company said in a statement.
On a conference call with analysts, BBCN Chief Executive Kevin Kim said the company had started negotiating with Wilshire even before Hanmi made its offer. A deal with Hanmi carried “high execution risk,” he added.
BBCN shareholders will own 59 percent of the new company, while Wilshire shareholders will own 41 percent after the deal closes, expected by mid-2016.
The combined company will be the seventh largest bank in California and will have $12.3 billion in total assets and $10 billion in deposits, the companies said on Monday.
BBCN Chief Executive Kevin Kim will lead the combined company, which will be renamed before the deal closes.
BBCN was advised by Keefe, Bruyette, & Woods Inc, while Sandler O’Neill Partners was Wilshire’s adviser.
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